Cardano Developer Requests Reduced Funding of $46.8 Million for Expansion

Input Output, the company responsible for building and maintaining the Cardano blockchain, has submitted nine proposals totaling $46.8 million for the 2026 funding cycle. This amount is roughly half of what the company requested in the previous year. The proposals primarily focus on enhancing Cardano's scalability and exploring Bitcoin-based decentralized finance opportunities. Cardano's community treasury, which is funded by network fees, will be used to support the development work, with community representatives voting to allocate the funds. Input Output has historically been the largest recipient of these funds due to its significant role in developing the underlying software. However, the company now aims to reduce its reliance on community funding and become self-sustaining through its own revenue. To achieve this, Input Output plans to gradually decrease its annual funding requests, allowing smaller, specialized teams to take on more responsibilities. By the end of 2026, the company expects these teams to handle most of the work currently done in-house. The submitted proposals are divided into two main themes: scaling and Bitcoin DeFi. The first theme includes a consensus upgrade called Leios, which is expected to increase Cardano's transaction processing capacity by 10 to 65 times. This upgrade is scheduled for a test release in June and full deployment by the end of the year. The second theme focuses on a system called Pogun, which aims to bring Bitcoin-based decentralized finance to Cardano. Pogun will enable bitcoin holders to borrow and earn yield on their holdings through Cardano without relying on centralized intermediaries. The lending component of Pogun is targeted for public release in the second quarter. Other proposals cover performance improvements to Cardano's smart contract engine, security testing infrastructure, developer tools, and expanded API services. Each proposal has specific delivery leads and ties funding to delivery milestones, ensuring that funds are released in stages as different parts of the project are completed. The voting process, which opens on Tuesday and runs through May 24, will be decided by roughly 1,000 elected delegates representing ADA holders. The outcome of the vote will test whether Cardano's governance treats Input Output like any other grant applicant or continues to approve its requests based on deference. The Cardano Foundation has taken over the project's grant-funding arm, and Intersect, the governance organization, has assumed stewardship of core Cardano software, providing alternatives to Input Output. Meanwhile, Input Output has reported progress in the ecosystem, including the launch of a new Cardano stablecoin, USDCx, which has reached 14.6 million tokens in circulation within weeks of its launch. The total assets deposited on Cardano have also increased from $137.5 million to $142.7 million over the same period.